Trust in China: A Cross-Regional Analysis
AbstractUsing the cross-regional data, this paper shows that trust has a strong effect on uneven development of economy in China. As is discovered in many studies, it is found that trust affects the growth of economy, size distribution of enterprise, and FDI inflow and so on. We also find that cross-regional differences of trust in China are reflections of the regional diversities of education, marketization of economies, urbanization, population density and transportation facilities. Although not statistically significant, “too many officials” may damage social trust. The paper demonstrates that trust cannot simply be taken as a cultural heritage. The paper also argues that sustainability of further economic development of China much depends on how fast China can build trust-facilitating institution, and that the most fundamental institution for trust is the property right.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2003-586.
Length: 22 pages
Date of creation: 01 Jun 2003
Date of revision:
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Trust; Economic performance; Information Repeated game; Transaction;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-23 (All new papers)
- NEP-DEV-2003-11-23 (Development)
- NEP-IFN-2003-11-23 (International Finance)
- NEP-SEA-2003-11-23 (South East Asia)
- NEP-TRA-2003-11-23 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fisman, Raymond & Khanna, Tarun, 1999. "Is trust a historical residue? Information flows and trust levels," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 79-92, January.
- Hiroshi Sato, 2009. "Growth of Villages in China, 1990-2002," Global COE Hi-Stat Discussion Paper Series gd08-023, Institute of Economic Research, Hitotsubashi University.
- Robert C. Feenstra & Gordon H. Hanson, 2005.
"Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm,"
The Quarterly Journal of Economics,
MIT Press, vol. 120(2), pages 729-761, May.
- Robert C. Feenstra & Gordon H. Hanson, 2004. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," NBER Working Papers 10198, National Bureau of Economic Research, Inc.
- Fei Song & C. Bram Cadsby & Yunyun Bi, 2012. "Trust, Reciprocity, and Guanxi in China: An Experimental Investigation," Working Papers 1204, University of Guelph, Department of Economics and Finance.
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